There has been a persistent deficit budget year after year. Which of the following actions can be taken by the government to reduce the deficit? 1. Reducing revenue expenditure 2. Introducing new welfare schemes 3. Rationalizing subsidies 4. Expanding industries Select the correct answer using the code given below.

Reducing revenue expenditure and rationalizing subsidies are direct measures to lower government outlays, thereby narrowing the gap between spending and income to reduce the deficit. Option (d) is incorrect because introducing new welfare schemes and expanding industries require additional government expenditure, which would increase the deficit rather than reduce it. The core concept being tested is fiscal consolidation and the management of budgetary components.